Another Part of the Big Picture

I don’t want to bore you again with geopolitics but I must. I want to try to lay out another part of the big picture for you because it relates to currencies, currency values and thus power. But before going there, I want to take a step back for a moment; we live in a world where everyone must compete to “lose.” I know this sounds funny or even wrong but it’s not. Let me explain.

The dollar is weakening versus “stuff” and it is happening on purpose, it’s no accident. “Weakening” you ask? Yes, we actually do have very significant inflation in the U.S. no matter what you are told, deep down you know this. “Inflation” as you feel it or the cost of goods rising is not a function of “stuff” getting better. It’s not like the apples that you buy are now sweeter, the gas for your car gives you better gas mileage or the garbage service you pay for any better. No, what it is, is that there are more dollars outstanding constantly being created so they are simply worth less. Since the dollar is the “reserve currency” of the world, other currencies are priced against it and must at least devalue as quickly as the dollar so that their trade and manufacturing can compete. This is what I mean by “competing to lose,” all central banks are competing in a race to devalue their currency. If they lose this race…then their economy will lose.

Now, no country has ever devalued its way to prosperity, ever. Devaluing the currency is the base strategy that the U.S. is following which is forcing the rest of the world to play the same game. This is the rub, the rest of the world already knows that they are playing a game that cannot be won; in fact, it should never even be played. The game however is being played because of the reserve status of the dollar, but the participants are quietly leaving one by one. This is why you have been watching new alliances form and some old alliances become shaky or even fold. This is why many new trade deals have been announced so far this year. The process is so far advanced that Britain has even announced a direct trade deal with China which will use sterling and Yuan for settlement. I mentioned this the other day but I cannot stress strongly enough how important this is because Britain has been our number one ally through thick or thin for 100 years. Please understand the magnitude of this action and the “signal” the Brits have sent around the world.

I must say that the strategists of the East have been masterful. 10 years ago, what would the chances have been for Europe to cozy up to Russia? Are they cozying now? Not yet but wait until the weather starts to get cold. In a very big announcement, Russia and Austria have announced a joint pipeline deal that the EU and the U.S. wanted to go through Turkey. This is a big win for Mr. Putin (which seems to be a regular occurrence now).

Austria is acting in their own best interests even though contrary to EU and NATO (U.S.) wishes.

This deal will make Russia the gas supplier to Europe by default. The most hilarious thing is that the Western press has prognosticated that the U.S. could supply Europe with LNG (liquefied natural gas). LNG can never compete on a price basis with pipeline gas no matter how many times you say that it can. No infrastructure exists or ever could economically be built for LNG to supplant pipeline gas.

I mentioned in the above paragraph “not yet” as far as warming relations between Russia and Europe are concerned but I do want to point out the obvious. Russia is in fact putting a wedge between the U.S. and Europe. Even if Europe would like to stand by the U.S. and her “dollar,” when push comes to shove Russia is the one who has something to offer…the U.S. does not any longer. Think about this for a moment, it used to be that the U.S. could offer “protection” to Europe, do they need this anymore? Russia seems to be intent on doing business with Europe. Yes this could change but for now it looks like a business relationship where Europe might rather cross the U.S. than have their energy supply shut off.

I mentioned the German gold situation yesterday and how they no longer plan to repatriate it. For now this will “go away” as I mentioned, but what will happen when the “energy wedge” that Russia holds is driven deeper? Do you think that Germany might one day cry foul over their stolen gold when we can no longer offer them anything of value? Right now the only thing that we can offer them is a market for their exports, will we be able to import goods using a crashed dollar? Is this maybe one of the reasons that Germany “doesn’t want their gold back?”…because they know that it would surely crash the dollar all on its own? The answer is, “of course it is.”

Our goal is to make Mr. Putin look like the bad guy but he seems content to just do business. Shrewd business? Yes, very, but not dirty business. The way I see it is that China and Russia have given us the rope to hang ourselves with. Over the years we (the U.S.) have had many forks in the road where we could do the right thing or the wrong thing, we chose the wrong thing many times and the wrongs have piled up. China and Russia et al are not “rudely” pointing these things out to the world. They are merely going about their business and positioning themselves for the obvious future. They are not to this point pulling any triggers; they are just sitting back and watching us play Russian roulette all by ourselves.

They are playing this game for appearances sake because they know that it is not for the next quarter, the next year, 5 years or even 10. No, this is about the next 50-100 years or more. The dollar is being “unofficially” replaced right now; I suspect that within a year’s time (or less) it will be officially replaced. Whether you know it or not, you are watching history that will be spoken about, read about and rewritten many times in the future. Your future depends upon what you do now and how you prepare for what is coming because like it or not it is coming. Foreigners know this, sadly the vast majority of Americans still do not and won’t until it’s too late to do anything about it.

17 Comments

40 mule team
on June 26, 2014 at 11:49 am

Not to nit-pick, I love your columns and insight; it would be helpful to emphasize the route of the new Russian/Austrian pipeline (Black Sea to Bulgaria?), as I use your columns to try to educate and warn my kids what is coming our way, and I can usually just email appropriate ones without further comment. They are difficult to awaken to the danger, unfortunately.

Bill Holter
on June 26, 2014 at 1:20 pm

There is a map within the linked article by Zero Hedge. Your kids will awaken one way or the other …whether ahead of time or after it’s too late is the question.

Bill Garrison
on June 26, 2014 at 2:27 pm

Right on the money Bill as always. If you and I and thousands of other Americans can see it why can’t our Guberment see it too? Maybe they are too busy passing bills that hurt us and small business to even see the big picture.

We are now in a world of hurt which will only get worse. The election down in MS. proves that. You are right. This is history being made only it’s the demise of the USA that’s being done.

Bill Holter
on June 26, 2014 at 2:30 pm

The pawns in government cannot see it… but those pulling the strings have planned it.

devildog
on June 26, 2014 at 3:13 pm

Mr Holter: When do you think the planning began? Creation of the federal reserve?Money printing by LBJ for the great society-war on poverty and the Vietnam war followed by
DeGaul exchanging greenbacks for gold and Nixon taking us off the gold standard?Surely there were people who knew how
this would end(hyperinflation) as this is what governments have done throughout history.

Since 08 I read ALOT,trying to figure out how to minimize
the damage.If I had to choose just one column to read it
would be yours.

Bill Holter
on June 26, 2014 at 3:20 pm

thank you for the compliment. I have to believe this started with the creature from Jekyll Isle.

Bill, while I agree with what you lay out, the timeline will be stretched a few years I think. these things always seem to unfold slower than it seems at first. no matter I’ve getting in position since ’02 with PMs. wish I could get more people I care for to see what’s what.

Bill Holter
on June 26, 2014 at 3:39 pm

…slowly at first and then all of a sudden.

James
on June 26, 2014 at 11:42 pm

Chinese proverb – Be not afraid of growing slowly, be afraid only of standing still. If you look back in history of the persecution and abuse the Chinese have suffered from the western world you can see they have been waiting and planning this for a long time. The fall of the western system. A sleeping giant has awoke, and I think the Chinese will soon call “checkmate”

Bill Holter
on June 27, 2014 at 6:32 am

we do “live in interesting times”.

Kory
on June 27, 2014 at 7:36 am

Very informative column Mr. Holter,question, what does one do to lessen or completely eliminate the full blow of becoming a casualty of the currency war waging.

Bill Holter
on June 27, 2014 at 9:23 am

you cannot eliminate it as your life will definitely change drastically no matter how much preparation you do. You need to own gold, silver, have possession of them and possession of any stock certificates. You should of course plan for daily needs like food water meds. etc.

Bill,
I think your analysis is on. Yesterday I listened to Catherine Austin Fitts radio interview and it gave me pause. Could we be in for years of decline of the dollar? Is she right that the mechanisms to replace trade in dollars will take a while to develop? I like your response above about decline and then sudden dropoff but could the decline take longer than we think? In any case her 40 trillion dollar estimate of the ripoff is chilling. She mentions 911 as a massive cover up scheme almost as a throw away line. It behooves us to stay patient and keep putting the pressure on the lies, I think. Keep on with the pressure. The ways MiLords have for replenishing their slush funds are myriad.

Bill Holter
on June 27, 2014 at 9:25 am

I personally don’t think there is much time left and the move itself will be like flipping a light switch from on to off.

Spartacus Rex
on June 28, 2014 at 4:01 am

All my Dollars are in U.S. Gold & Silver Coin, so how is it that they are “weakening” there “dollar Bill”? BTW, have you had the chance to go back and review G. Edward Griffin’s book, ” The Creature from Jekyll Island”, specifically Chapter 26 “A Realistic Scenario”, so that you can post your own thoughts concerning Griffin’s simple solution to the Fiat problem? Cheers & Semper Fi, Spartacus Rex

calvin
on June 28, 2014 at 8:33 pm

Face it anyone know what the word perilous means ? well Gods word the Bible is being foretold right in front of our eyes Earthquakes pestilence false teachers times are getting hard and the end is near or at the door i dont know about you but i am getting my house in order so i can excape the mess that is about to take place

Bill Holter
on June 28, 2014 at 9:03 pm

but…where do you go to hide? My opinion is that only a sailboat on the open seas will work…until you have to fight pirates.

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